Lawmakers and government officials on Monday discussed draft amendments to help secure Taiwan’s critical technologies from theft by China and other foreign powers. Although details of the proposals were not disclosed, they likely incorporate ideas brought up in October last year at a Taiwan-Japan-US workshop on intellectual property rights.
In a statement released on the opening day of the conference, American Institute in Taiwan Director Brent Christensen said that the protection of intellectual property rights “is the key ingredient to attract investment and encourage innovation.” Although neither Christensen nor Deputy Minister of Foreign Affairs Tien Chung-kwang (田中光) made specific mention of China, it is likely that Chinese theft of trade secrets was a topic at the gathering, or at least one of the motivations for holding it.
A Bloomberg report published on Jan. 27 addressed how the world’s reliance on Taiwanese semiconductor technology is a growing concern for policymakers. Therefore, it is reasonable that the US would be concerned about Chinese theft of Taiwanese technology and would want to cooperate with Taiwan to prevent it. There has also been a surge in prosecution of cases involving theft of trade secrets in the US.
Prosecuting intellectual property theft was difficult in the US, as state prosecutors were hampered when pursuing interstate or cross-border cases. Companies could pursue charges under the US Economic Espionage Act when theft involved a foreign power such as China or Russia, but the FBI often lacked the resources to pursue such lengthy investigations. For that reason, cases often failed to make it to trial, or prosecutors would simply pursue lesser charges.
Former US president Barack Obama addressed the issue with the Defend Trade Secrets Act, which went into effect in 2016. It allows companies to take trade-theft cases to federal court in the US.
Taiwan faces a similar issue. For example, a businessman found guilty in 2019 of stealing trade secrets related to the production of smart glass from two Taiwanese companies and selling them to a Chinese firm was sentenced to only 18 months in prison and fined NT$2 million (US$70,267). He had set up a local company through which he handled business dealings with the Chinese firm, and had traveled on several occasions with an engineer to Chengdu to teach Chinese engineers how to produce the glass.
Officials on Monday said that such cases are difficult to prosecute under current laws, because investigators are often unable to prove the involvement of foreign powers, or investigate matters outside of Taiwan.
This is concerning not only because of the economic implications, but also because technology sold to China that has military applications would almost certainly end up in the hands of the Chinese People’s Liberation Army.
It is at least partly for this reason that officials are seeking to make a distinction between critical and noncritical technologies. Under the proposed amendments, situations involving critical technologies would be tried as national security cases, without the need for prosecutors to prove involvement by a foreign power. This would help protect national security, as well as the interests of Taiwanese firms.
However, just as with laws against misinformation, careful execution of the law is crucial to protect individuals from malicious litigation.
Hopefully, legislators will glean what they can from the experience of US officials. Cooperation with the US and other countries on the issue — such as sharing investigative information and extraditing suspects — would also prevent Taiwanese abroad from stealing trade secrets for China.
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